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HomeMy WebLinkAbout09-14-09-R �'S DEN HILLS Approved: October 12, 2009 CITY OF ARDEN HILLS, MINNESOTA REGULAR CITY COUNCIL MEETING SEPTEMBER 14, 2009 7:00 P.M. - ARDEN HILLS CITY COUNCIL CHAMBERS CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof, Mayor Stan Harpstead called to order the regular City Council meeting at 7:00 p.m. Present: Mayor Stan Harpstead Council Member David Grant Council Member Brenda Holden Council Member Dave McClung Council Member Fran Holmes Absent: None. Also present: City Attorney Jerry Filla City Administrator Ronald Moorse Finance Director Susan Iverson Public Works Director Gregory Hoag Civil Engineer Kristine Giga Community Development Director James Lehnhoff Jim Tolaas, Ramsey County Public Works Jamie Thelen, CEO Sand Companies, Inc. Recording Secretary, Tina Borg. PLEDGE OF ALLEGIANCE L APPROVAL OF AGENDA Mayor Harpstead stated item 7D would be stricken from the agenda. ARDEN HILLS CITY COUNCIL—September 14, 2009 2 1. Approval of Agenda(continued) Councilmember Holmes requested item 41) be pulled from the Consent Calendar. MOTION: Councilmember McClung moved and Councilmember Grant seconded a motion to approve the agenda as amended. The motion carried unanimously (5- 2. PUBLIC INQUIRIES/INFORMATIONAL Public Mayor Harpstead opened the public inquiries/informational at 7:05 p.m. Dennis Probst, 3395 Lake Johanna Blvd., Arden Hills, urged the Council to continue to look into ways to make the TCAAP property deal work out so that the City can maintain control over what happens with the land and how it is developed. Steve Gjerdingen, 2553 Fisk Street, Roseville, admires the Council having trails included in their Capital Improvement Plan and stated that it would be a great opportunity for the City to connect the neighborhoods on Hamline Avenue with Red Fox Road when Interstate 694 is widened between Interstate 35W and Interstate 35E. He asked that the Council consider this. Mayor Harpstead closed the public inquiries/information at 7:09 p.m. A. TCAAP Update - City Administrator Ronald Moorse stated that there had been a conference call with Kevin Legare of the GSA at 2:00 today. The call was an opportunity to obtain an update regarding the status and timing of the elements of the GSA's planned public sale process, discuss information/requirements to be included in the Invitation for Bid, and discuss how and when City information regarding the property gets provided to potential buyers. Scope of services and bid requests have been sent out by the GSA for a marketing firm to put together a website regarding the TCAAP property. A bidder's conference is planned for late October. This will be an opportunity to provide information to potential bidders. Councilmember Holmes asked if the marketing firm would need to be in place before the bidder's conference. ARDEN HILLS CITY COUNCIL—September 14, 2009 3 2.A TCAAP Update(continued) City Administrator Moorse stated that the marketing firm would be in place but they would not have all their work completed by the bidder's conference. Councilmember Holmes asked if it was anticipated that all interested parties would be in attendance at the bidder's conference. City Administrator Moorse stated that the GSA would like to have all the interested parties at this bidder's conference. Councilmember Holmes asked if there would be another bidder's conference and if so when it would be held. City Administrator Moorse stated that there would be another bidder's conference in the spring of 20 10. Councilmember Holmes asked if this meant that the public sale would not happen before the spring of 20 10. City Administrator Moorse stated that this was correct. Councilmember Holden stated that one of the questions that the GSA kept asking was "what is the best fit for the City." The question was asked if someone came forward and met all the criteria including funding and insurance, if the bid would be - accepted even if it was not the best fit for the City. The GSA responded that they would have to think about this and get back to the City. - City Administrator Moorse stated that a date for a joint work session with the Ramsey County Board to discuss the reuse of the TCAAP property for parks and open space and to discuss the County's interest in obtaining the land for parks and open space was scheduled for October 20 and this would be an open public meeting. I APPROVAL OF MINUTES A. July 27, 2009 Regular City Council Meeting Be August 10, 2009 City Council Worksession Meeting Councilmember Holmes stated that on page 6, the sixth paragraph should state it was the consensus of the Council and strike Mn/DOT. ARDEN HILLS CITY COUNCIL—September 14, 2009 4 3. Approval of Minutes(continued) C. August 10, 2009 Regular City Council Meeting MOTION: Manor Harustead moved and Councilmember Holmes seconded a motion to approve the July 27, 2009 Regular City Council Meeting Minutes as presented, the August 10, 2009 City Council Worksession Meeting Minutes as amended and the August 10, 2009 Regular City Council Meeting Minutes as presented. The motion carried unanimously (5-0)., 4. CONSENT CALENDAR A. Claims and Payroll B. Motion to Approve Payment #6 to Frattalone Companies, Inc., of Little Canada, Minnesota, in the Amount of $156,449.89 for the 2009 Pavement Management Program C. Motion to Approve Payment in the Amount of$33,595.05 to Kimley- Horn for Engineering Services in July for the ARRA Elmer L. Anderson Memorial Trail Connection Project Tl Aiip,*;a,-, t., Ada-.+ AID �nn0 rn3• DoQ„1„��E� i • 111V V1V 11 LV 11\.LV II{. 1��V�7VI KLZV II 1`r �1 ( (1 A 4111N�1H lF tNAY1'1 �/I'N/I ■■ ■T �Allh� �/IllN1A1N1I1� lYN�pY11pN�' DMA t 1 N.11\.Lllls 11 Vlll leiAL-P N-J1 X37TLCT'g'�V�'V1IIGt2'C':I-CO--LII��i��n� �'i �r��rr��nv �'�7�� r'VL'CQTTDIT GTTi uiu u,nl•,.T zn�� 51 .. &XX E. Motion to Approve Payment #1 to Pearson Bros., Inc. of Hanover, - Minnesota, in the Amount of $91,864.53 for the 2009 Crack Repair and Seal Coat Project F. Motion to Approve the August 12, 2009, Pay Application #6, from A.J. Spanjers, for the Total Amount of$14,828.88 G. Motion to Accept the Resignation of James Paulet from the Economic Development Commission H. Motion to Approve Resolution 2009-023 for the Appointment of Arlene Mitchell to the Financial Planning and Advisory Committee for a Term to Expire December 31, 20 10 MOTION: Councilmember Grant moved and Manor Harpstead seconded a motion to approve the Consent Calendar as amended and to authorize execution of all necessary documents contained therein. The motion carried unanimously (5-0)., ARDEN HILLS CITY COUNCIL—September 14, 2009 5 5. PULLED CONSENT ITEMS 4D. Motion to Adopt Resolution No. 2009-022: Resolution Requesting Funding from Mn/DOT through the Municipal Agreement Program for Bridge Improvements to the County Road E Bridge over Trunk Highway 51 Civil Engineer Kristine Giga stated that at the August 31, 2009 Regular City Council Meeting, Staff received direction from Council to prepare an application for funding through Mn/DOT's 2009 Municipal Agreement Program for modifications to the existing County Road E bridge over Snelling Avenue (TH5 1). The City Council amended the original Kimley-Horn County Road E contract to assist in the preparation of this application. The Municipal Agreement Program provides funding to construction projects that are developed and administered by local agencies and provide a benefit to both the local community and the trunk highway system. Right of way, utility relocation and design costs are not eligible for funding. The maximum award available for any project is $550,000 for construction plus 8% for construction engineering and inspection, for a total of $594,000. Kimley-Horn has provided a preliminary estimate for construction of the repairs to the County Road E Bridge in the amount of $400,000. The estimate contains modifications to the existing bridge, as well as bituminous patching, concrete curb and gutter replacement, striping on the approaches in order to accomplish the centerline shift and sidewalk/path approaches. It is not likely that there will be utility relocation or right of way costs involved with the project. Councilmember Holmes stated that the fifth "Whereas" in the resolution references local share of the costs. She asked what the match was. Civil Engineer Giga stated that the City's contribution to the project would be costs involved with any right of way that may need to be acquired, utility relocation, and design costs. The local share would be anything that is not funded by the award from Mn/DOT. Councilmember Holmes clarified that this project was not expected to have any costs associated with right of way or utility relocation. The City's portion would then be the design costs. Civil Engineer Giga stated that this was correct. Councilmember Holden asked if there was any way to improve the rail that was being replaced with a more decorative rail. ARDEN HILLS CITY COUNCIL—September 14, 2009 6 4D. Motion to Adopt Resolution No.2009-022(continued) Civil Engineer Giga stated that she would look into this with Kimley-Horn and get back to the Council. Councilmember Holden asked if construction would begin next year. Civil Engineer Giga stated that with this funding construction could begin in 20 10. MOTION: Councilmember Grant moved and Mayor Harpstead seconded a motion to Adopt Resolution No. 2009-022: Resolution Requesting Funding from Mn/DOT through the Municipal Agreement Program for Bridge Improvements to the County Road E Bridge over Trunk Highway 51. The motion carried unanimously (5-0). 6. PUBLIC HEARINGS None. 7. NEW BUSINESS A. Motion Adopting Resolution 2009-021: A Resolution Supporting the Construction of a Noise Wall Along the North Side of County Road State Aid Highway 96 Between Interstate 35 West and US Highway 10 Civil Engineer Giga stated that Ramsey County is developing plans to reconstruct the intersection of County Highway 96 and US Highway 10. As part of the process and in accordance with state and federal environmental rules, the County has evaluated a number of issues along the corridor. One of the issues analyzed was highway noise. The noise analysis has indicated that highway noises in the northwest quadrant of the intersection would exceed state standards. The analysis concluded that a noise wall in this area would meet the cost reasonableness criteria. A public hearing was held on August 31, 2009, to receive input from property owners adjacent to the proposed noise wall. A questi on was raised at the public hearing regarding the type of pavement used in the noise analysis. Civil Engineer Giga stated that Ramsey County's consultant confirmed that the MNNOISE model is based on an average pavement. It is neither a new smooth surface, nor an old rough surface. It is also neither specifically bituminous nor concrete. The language in Resolution 2009-021 currently states "10-foot or 20- foot" noise wall, in reference to the height of the proposed noise wall. Ramsey ARDEN HILLS CITY COUNCIL—September 14, 2009 7 7A. Motion Adopting Resolution 2009-021 (continued) County is requesting that the City consider a specific height of the noise wall when considering a resolution of support. Mayor Harpstead asked what the next steps would be. Mr. Jim Tolaas, Ramsey County Public Works, stated that the environmental assessment needs to be completed and this would be out for public review. The next step would be final design and there are several steps in this and then a final approval The further into the final design process there will be fewer changes available. The Council will continue to have additional input and be able to view the final designs. Mayor Harpstead asked if a 20-foot wall was approved would it be possible to shorten it at a later date. Mr. Tolaas stated that is may be possible provided it is not done too late in the process. Councilmember Grant asked if it was the County's intent to have a similar design as Vadnais Heights. He asked if the County was trying to maintain some kind of conformity across Highway 96. Mr. Tolaas stated that when the County first did their concept it was with all the communities participating. There was supposed to be enough consistency within the corridor but still leave some latitude to allow for some decisions for the City. In terms of the appearance, the color and the design should be comparable. MOTION: Councilmember Holden moved and Councilmember Grant seconded a motion Adopting Resolution 2009-021: A resolution Supporting the Construction of a 20-Foot Noise Wall Along the North Side of County Road State Aid Highway 96 Between Interstate 35 West and US Highway 10. Councilmember Holmes stated that the community is in support of a 20-foot noise wall and the Council should vote for what the residents are requesting. The motion carried unanimously (5-0). ARDEN HILLS CITY COUNCIL—September 14, 2009 8 B. Motion to Adopt Resolution 2009-024: A Resolution Setting the Preliminary Levy for Taxes Payable in 2010 in the Amount of $390579666 Motion to Adopt Resolution 2009-025: A Resolution to Adopt Truth-In-Taxation Public Hearing Dates for Proposed Taxes Payable in 2010 Finance Director Susan Iverson stated that by September 15, 2009, the City is required to adopt and certify to Ramsey County a preliminary levy and Truth-In- Taxation hearing dates. Based on Council direction at the August 17, 2009, work session, Staff has prepared a preliminary levy of$3,057,666. This is a decrease of $32,805 over the number given the Council at the work session as Staff has incorporated the changes requested by the Council. Staff has also received word from the City's insurance carrier that the increase will be 1% and the previous percentage used was 8%. The overall levy limit for the City of Arden Hills with the State mandated levy .limit plus allowable special levies is $3,151,708. The proposed 2010 levy is $94,042 under that limit. The overall increase in the proposed levy is a 3.7% increase over the 2009 levy; however the City's portion of the levy is $2,792,928 after Fiscal Disparities, which equates to a 3.7% increase over the 2009 City's portion of the levy. This results in a 12% increase in the Tax Rate from 2009. The impact on an average medium home valued at $278,000 is an increase of $24.61 or 4.2% annually. The average decrease in market value for residential property in Arden Hills was 6.6%. One item to note is the unallotment of MVHC for the State of $61,774 for 2010. This amount is figured into the preliminary 2010 budget. Market Value Homestead Credit is credited to property owners on their property tax statements and then reimbursed to the City from the State. The City has been informed from the Department of Revenue that the City will not receive this amount, so the preliminary budget and levy has accounted for this. Finance Director Iverson stated that the 2009 Legislature changed the Truth-In- Taxation laws. The City is now only required to announce and schedule one regular meeting at which the Council discusses the budget and levy and takes comments from the public. The City may adopt the budget and final levy after the hearing during the same meeting. The meeting must be between November 25 and December 26 and must occur at or after 6:00 p.m. The City must notify the County Auditor by September 15, 2009. The Council may choose to continue as it has previously and have a separate meeting or the City may choose to do this at a regular meeting. It is anticipated the Council will adopt the final 2009 levy payable in 2010, and the 2010 budget, on December 14, 2009. ARDEN HILLS CITY COUNCIL—September 14, 2009 9 7B. Motion to Adopt Resolution 2009-024 and Motion to Adopt Resolution 2009-025(continued) Councilmember Holden asked if the public hearing had to be at a regular meeting. Finance Director Iverson stated that the meeting did not have to be at a regular meeting but it could not be held any earlier than 6:00 p.m. Councilmember McClung asked to clarify that the recommended changes from Council and the new figure from the insurance company had been accounted for in the amount being presented. Finance Director Iverson stated that this was correct. All the recommended cuts from the Council are in the current figure and the $10,000 for Celebrate Arden Hills was added back in. Councilmember Grant asked if the levy would have been 1.6% without the unallotment of the market value credit. Finance Director Iverson stated that this was correct. Councilmember Grant asked for clarification on what was included in the 3.1% Public Safety amount. Finance Director Iverson stated that this includes the Fire Department and the Police Contract. This amount reflects the increase of the contracts for this year over the amounts of the contracts for last year. Councilmember Holden asked what unfunded large projects the City had at this time. Finance Director Iverson stated that this would include the B2 District, Valentine Hills, some of the parks, the water tower maintenance, and possibly Snelling Avenue. The new Equipment, Building Replacement Fund was set up and the City transferred $500,000 to that. At this time Staff is looking for alternative ways to fund this so that the money is on a rolling basis. Mayor Harpstead asked what transfers were planned in the budget. Finance Director Iverson stated $200,000 that is transferred to the PIR Fund for construction, $40,000 from the General Fund going to the Equipment Building Replacement Fund, and $12,000 to the EDA Fund. ARDEN HILLS CITY COUNCIL—September 14, 2009 10 7B. Motion to Adopt Resolution 2009-024 and Motion to Adopt Resolution 2009-025(continued) MOTION: Mayor Harpstead moved and Councilmember Holden seconded a motion to Adopt Resolution 2009-024: a Resolution Setting the Preliminary Lem Taxes Payable in 2010 in the Amount of $3,057,9666. Councilmember Grant stated that this was setting the preliminary levy and not the final levy. The Council could always lower the amount once the preliminary levy has been set but the council cannot raise the amount. Councilmember McClung stated that he would be in support of this resolution and would like to encourage Staff and Council to continue to make additional cuts before the December meeting to set the final levy. Councilmember Holden clarified that there were no raises in the budget for non- union City employees. Finance Director Iverson stated that there were only step increases and no pay increases for non-union employees. The union contract does have a 3% increase. Councilmember Holmes asked if there were any contingencies built into the budget. Finance Director Iverson stated that there were no contingencies in the budget. Councilmember Holmes stated concerns that the City may be cutting the budget too close and she would like to see it a little higher. Councilmember Grant asked Finance Director Iverson what estimated amount of the budget was not spent each year. Finance Director Iverson stated that the average was about $80,000 to $100,000. She cautioned the Council that in the last two to three years there had been open positions in the budget and they have since been cut out of the budget. Mayor Harpstead stated that there was one open position still in the budget at this time. Finance Director Iverson stated that that the Assistant City Administrator position was cut out but the Public Works Superintendent position was still in the budget. ARDEN HILLS CITY COUNCIL—September 14, 2009 11 7B. Motion to Adopt Resolution 2009-024 and Motion to Adopt Resolution 2009-025(continued) Mayor Harpstead stated that after surveying other cities an increase of 3.7% was in the middle. He stated that he would support this levy at this time. The motion carried unanimously (5-0). MOTION: Mayor Harpstead moved and Councilmember McClung seconded a motion to Approve Resolution 2009-025: A resolution to Adopt Truth-In-Taxation Public Hearing Date of December 14, 2009 at 7;00 p.m. for Proposed Taxes Payable in 2010. Councilmember Grant asked if this would be during the regular City Council meeting. Councilmember Holmes recommended having the meeting at 6:00 p.m. in order to allow enough time for residents to discuss this. MOTION: Councilmember Holmes moved and Councilmember Holden seconded a motion to amend the meeting time to 6:00 p.m. Councilmember Grant stated that there was a clerical error on the address and it should read 1245 West Highway 96. The motion to amend the time of the meeting to 6:00 p.m. carried unanimously (5-0) The amended motion carried unanimously (5-0). C. Motion to Approve the Arden Hills Private Activity Revenue Bond Financing Procedures Effective September 14, 2009 Motion to Approve the Arden Hills Post-Issuance Debt Compliance Policy Effective September 14, 2009 Finance Director Iverson stated the City has been approached on various occasions to issue Conduit Debt for organizations such as Presbyterian Homes. It is anticipated that Northwestern College is also going to approach the City on this subject. The Financial Planning and Analysis Committee have developed a "Private Activity Revenue Bond Financing" procedure, which includes an application process and fees. City Bond Council has reviewed these procedures and ARDEN HILLS CITY COUNCIL—September 14, 2009 12 7C. Conduit Debt Policies(continued) applications and they are very similar to what other municipalities in the Twin Cities metropolitan area are using. This procedure will provide a process whereby the applicant provides the City all the data needed about the offering and the fees that are to be paid. Another issue is Post-Issuance Compliance. The Financial Planning and Analysis Committee have developed a "Post-Issuance Compliance Policy" to comply with the Internal Revenue Code regulations. A set of procedures has also been developed to implement the compliance policy. Bond Council has also reviewed this policy and procedures. Councilmember McClung stated that in the past the Council has used a percentage of the amount being asked for to calculate a fee. He asked why this was not being used in the procedures. Finance Director Iverson stated that in the past the rate had been negotiated on a case-by-case project. Other cities are using an annual fee based on the outstanding amount rather than c one-time charge. It is estimated that the 1/8 of 1% annual rate will bring more revenue to the City. This revenue is an asset for the City. Councilmember Holden asked how the figure of 1/8 of 1% was arrived at. Finance Director Iverson stated that Staff had evaluated what other cities were doing and the rate of 1/8 of 1% was a common rate that was charged. Mayor Harpstead stated that one-time fees at the beginning or an annual annuity of the outstanding amount were the choices that the City had and the annual annuity of the outstanding amount brings in more funds for the City. Mayor Harpstead stated that the Post-Issuance Debt Compliance Policy was initiated because other cities were caught and audited by the IRS because they had not managed the conduit financing that they had on their books. It becomes and issue when individuals use conduit financing and during the time when the project is not built earning market rate on the money which ultimately became a mechanism of profit which no longer fit under the tax free purpose. Councilmember Grant stated that there had been conversation in the past about cities marketing their conduit financing. Part 1 under General states that the City has the authority to "attract or promote economically sound industry and commerce to the City". He asked if this limited the City to just Arden Hills or if the City would be able to take on other conduit financing. ARDEN HILLS CITY COUNCIL—September 14, 2009 13 7C. Conduit Debt Policies(continued) Finance Director Iverson stated that the City would be able to operate as they have in the past. The language is taken from the statute. MOTION: Councilmember Holden moved and Mayor Harpstead seconded a motion to Approve the Arden Hills Private Activity Revenue Bond Financing Procedures Effective September 14, 2009. The motion carried unanimously (5-0). MOTION: Councilmember Holden moved and Councilmember Grant seconded a motion to Approve the Arden Hills Post-Issuance Debt Compliance Policy effective September 14, 2009. The motion carried unanimously (5-0). M.-re &'%�.L JL-W-A- A...........ses E. Motion Regarding Sand Companies, Inc. Request for a Letter of Support for Housing Tax Credits with the Minnesota Housing Finance Agency as Proposed in the September 14, 2009, Memorandum Community Development Director James Lehnhoff stated at the August 19, 2009 work session, the City Council reviewed a presentation from Sand Companies, Inc. (SCI) to construct a 55-unit workforce rental housing building at 1296 County - Road F. The 2.74-acre property is immediately west of the Land O'Lakes headquarters and includes a communication antenna that would remain on the site. SCI has requested a letter of support from the City for a housing tax credit with the Minnesota Housing Finance Agency (MHFA). Additionally, SCI is requesting $400,000 in public assistance. Applications with community financial support score higher and have a better chance of obtaining the housing tax credits, which are a key part of making the building affordable. The public financial assistance could be in the form of Tax Increment Financing (TIF) or relief from other development fees. The City has two TIF options: creating a new TIF district or extending the existing Cottage Villas TIF district. Alternatively, the City could reduce or waive the development fees. Based on the preliminary design and project value, the estimated building permit fee is $72,500. City sewer and water access charges (SCA/WAC) would be an additional $34,600. Since they intend to subdivide the existing antenna from the rest of the lot, it would be subj ect to the park dedication fee. The park dedication fee is estimated at $71,560. The base cost for the Comprehensive Plan amendment, rezoning, planned unit development, and subdivision application is $3,000. The total estimated cost for all City related ARDEN HILLS CITY COUNCIL—September 14, 2009 14 7E. Arden Village Letter of Support(continued) development fees is $181,660. While waiving all or a portion of the fees can be simpler than creating a new TIF district, Staff would be concerned about waiving or significantly reducing the fees because that represents a direct cost to the City for services that would still be provided. Without the fees, the costs would need to be absorbed elsewhere in the budget. Conversely, a new TIF district requires additional front-end footwork but the costs are supported by the project itself through property taxes. As with any TIF district, the new increment of property taxes would go to the development instead of being distributed out to the City, County, and School District. The deadline for the housing tax credit application is October 1, 2009. In order to meet that deadline, SCI would need a letter of support from the City by September 14, 2009 so that they can complete the other application requirements, including a housing market study that is specific to the property. It is important to note that a letter of support is not an approval of the project. The letter of support is a good faith commitment from the City to provide the requested support if the housing tax credits are approved by MHFA and if the project meets City requirements. The Council is not being requested to create or approve a TIF district tonight. A full review will be needed if the project moves forward. Mr. Jamie Thelen, CEO Sand Companies, Inc., reviewed some of the challenges that had been discussed at the work session including traffic, noise from Interstate 694, and access to transit. He stated that the benefits for this development in this location would be that it meets the principles of smart growth; the site is an infill - site so there are no extensions of water sewer or streets and utilities, it takes advantage of compact building, and it is near many jobs. The development will - help the City meet a number of its housing goals including housing diversity, affordability and quality. The City has an opportunity to use an existing TIF District and if they chose to do this they could begin to collect revenue on this property as soon as it is complete. This project is still a couple of years from construction and this may assist the City with budget constraints they may have at this time. Assistance from the City also opens up new funding sources for the project, especially from the MET Council. Mayor Harpstead asked if the presentation that Sand Companies had presented at the work session was on the website. Community Development Director Lehnhoff stated that it will be. Councilmember Holmes stated that the City prefers to have owner occupied rental properties. She asked if Sand Companies would manage the property and if so for ARDEN HILLS CITY COUNCIL—September 14, 2009 15 7E. Arden Village Letter of Support(continued) how long. She asked if there were any guarantees that Sand Companies could provide for the City. Mr. Thelen stated that the program that they are applying for makes a sale difficult and the flipping of the property would be extremely difficult due to the strict restrictions. Sand Companies has not sold any of the properties they have. Councilmember Holden asked what percentage of the cost Sand Companies was putting into the project. Mr. Thelen stated that the Council was provided with a sources and uses of funds list. Some of the funds are from limited equity and this is cash equity that Sand Companies puts into the project. Councilmember Holden asked if there would be any funds coming out of pocket for Sand Companies and if Sand Companies would be getting revenue for managing the property. Mr. Thelen stated that Sand Companies would be receiving revenue for managing the property and the funds coming out of pocket would be from the equity. Community Development Director Lehnhoff stated that the sources of funds listed by Sands Companies were first mortgage of $1.95 million, $7.2 million in equity, $1.65 million in deferred loans, and if TIF is approved by the City this would be $400,000. - Councilmember Grant asked Finance Director Iverson what the annual amount from the Cottage Villas TIF would be if it were extended. Finance Director Iverson stated that that it was about $50,000. The TIF would produce about $545,000 if they choose to extend it Councilmember Grant stated that he had anticipated using the TIF for senior housing on the old City Hall property or perhaps some uses in the County Road E area. Finance Director Iverson stated that she had checked with the financial advisor and she will bring this to the Council in October. The City can have some proposed uses but the City does not need to have a specified plan in order to extend the district. ARDEN HILLS CITY COUNCIL—September 14, 2009 16 7E. Arden Village Letter of Support(continued) Councilmember Grant asked if the TIF could be closed in about four years based on $400,000. Finance Director Iverson stated that this could be provided the City did not want to use the TIF in other areas. Mayor Harpstead clarified that TIF did not need to be decided at this meeting. Community Development Director Lehnhoff stated that was correct. Councilmember Grant asked if it was an option for the City to TIF this district and let the property run longer. Finance Director Iverson stated that this was an option. She stated that she had not checked into all the details. Councilmember Grant asked if the funds after ten years were in excess of $400,000 if those funds could be used elsewhere in the City. Finance Director Iverson stated that she would check the laws regarding this. The laws that would apply depend on the TIF District creation date. Councilmember Holmes asked Finance Director Iverson how much in public assistance in TIF the City had provided to Cottage Villa. Finance Director Iverson stated that she did not have the financial statement at this time and would provide this figure to the Council. She estimated that the City provides about $40,000 a year. Councilmember Holmes asked how this works out. Finance Director Iverson stated that they come up with a developer note in the beginning and there is a set amount of financing and this is the amount that they get and when they reach that point the City does not pay this anymore and the City can decertify the district or if there is other uses for this fund then it can be used for something else in affordable housing. The City sets up a loan or note and it is paid off based on the agreement with the developer. Mayor Harpstead asked when Cottage Villa started and how many units were at this location. ARDEN HILLS CITY COUNCIL—September 14, 2009 17 7E. Arden Village Letter of Support(continued) Finance Director Iverson stated that it was somewhere between 1993 and 1995. Mayor Harpstead stated that it was not at $40,000 a year right away and would have only been at this level in the last few years. Councilmember Holmes stated that there were about 53 units. Community Development Director Lehnhoff stated that both developments had 50 to 60 units. Cottage Villas also used housing tax credits. Councilmember Holmes asked what was located to the west of the proposed development. Community Development Director Lehnhoff stated that there is an office building owned by Bethel University to the west of the proposed development. Councilmember Holmes asked for clarification where the building would be located on the property. Mr. Thelen stated that the building would sit lengthwise perpendicular to County Road F. The parking lot would be located on the east side of the property. The entrance would be lined up with the entrance that is across the street. Mayor Harpstead asked if the underground parking would be accessed from the south. He also asked if there was a mix of apartments. - Mr. Thelen stated that the underground parking was accessed from the south side. He also stated that there building would have a mix of mostly two and three bedroom apartments; 34 — two bedroom units, 15 — three bedroom units, and 6 — one bedroom units. Mayor Harpstead stated that there was a concept of a tot play area. Mr. Thelen stated that all of the developments have a tot play area. There are also grills and a basketball court area. They will try to have as many amenities on site as possible. Councilmember Holden asked what the area was currently zoned. Community Development Director Lehnhoff stated that it is currently zoned Industrial 1. ARDEN HILLS CITY COUNCIL—September 14, 2009 18 7E. Arden Village Letter of Support(continued) Councilmember Holden asked if the Comprehensive Plan would need to be changed if the zone were changed. Community Development Director Lehnhoff stated that this is correct. The Comprehensive Plan change may be just an administrative change because of the size of the property. Any Comprehensive Plan amendment would need Council approval Councilmember Grant asked where the antenna owned by Great Rivers is located on the property. He asked if only a portion of this land was going to be purchased. Mr. Thelen stated that he is under contract for the whole property. Sand Companies would split off the tower site. Sand Companies would own both sites. Councilmember Grant asked if Sand companies would own the Tower. Mr. Thelen stated that Sand companies would own the land and there is a lease for the tower. They are not sure if this is a ground lease or a lease for just the tower at this time because they have not seen the legal documents on this. Councilmember Grant asked if Sand Companies would have any financial interest in the tower. Mr. Thelen stated that they would once it was purchased. They would break off the tower lease from the housing development because there are different mortgages involved. Councilmember Grant clarified that Sand Companies will own the land but not the tower. Mr. Thelen stated that at this time it is only under contract and they do not own the property at this time. They have not seen all the legal documents pertaining to the tower and do not know at this time if the tower is owned. It is currently in a trust and they do not know if the trust owns the tower or if they just have a lease on the land and someone else owns the tower. There are some default issues that are going on and all the details are not known at this time. Councilmember Grant stated that the Council needs to determine if they are comfortable making a zoning change which would put a residential property in an industrial zone. ARDEN HILLS CITY COUNCIL—September 14, 2009 19 7E. Arden Village Letter of Support(continued) Mayor Harpstead stated that the discussions tonight were in regards to a letter of support. He asked Staff if this implied that the zoning decision was made tonight as well. Community Development Director Lehnhoff stated that technically the zoning decision is not made tonight. The two items are directly related but the request at this time is not for a zoning change. Mayor Harpstead stated that the process would still need to go through the planning commission and public hearing process. Community Development Director Lehnhoff stated that this is correct. Mayor Harpstead stated that the question was if the Council wanted to draft a letter of support. He stated that there are, usually in this pool of funds, multiple applications throughout the region or state. He asked Mr. Thelen if he had any indication what ratio of these applications received funding. Mr. Thelen stated that there are about 30 to 40 applications throughout the state and about 30% to 40% of those will get funded. Mayor Harpstead clarified that there was a chance that the project would not get funded. Mr. Thelen stated that this was correct. One of the big scoring aspects when competing for the funding is a project that has some local support. Councilmember Grant stated that moving forward in the process the Council will need more detail on the tower and what exactly the relationship between Sand Companies and the trust will be. The tower has a revenue stream attached to it that the Council needs to be aware of when issuing TIF. Mayor Harpstead stated that ideally if the trust's fiduciary duty they would discount to the present all the future cash streams from the tower and exercise that in the sale price of the property. Councilmember McClung stated that the Council would need clarity regarding the tower before they approve final TIF for this property. Finance Director Iverson stated that this was correct. ARDEN HILLS CITY COUNCIL—September 14, 2009 20 7E. Arden Village Letter of Support(continued) MOTION: Manor Harpstead moved and Councilmember McClung seconded a motion to Approve the Sand Companies Request for a Letter of Support for Housing Tax Credits with the Minnesota Housing Finance Agency as Proposed in the September 14, 2009, Memorandum and the Specific Language as Presented in the Packet. Councilmember Holden stated that she would be voting against the motion. She stated that she did not like the City having multiple TIF Districts and she had problems with changing the zoning code for this project. Councilmember Holden stated that she could not support the location for this project because there is only one access point and the project would be isolated from other residential areas. Councilmember Grant asked if there was a possibility of designing an ingress egress that utilizes the Bethel University location. This may allow for another way out of the property. Mayor Harpstead stated that this was something that the properties could work on. Councilmember McClung stated that he had received some comments from the residents and they were generally supportive of this motion. The City needs to do - something about affordable housing especially since TCAAP is up in the air. Before final approval is given the issues concerning the tower will have to be worked out. Councilmember Holmes stated that she was in support of this request. This was a good location and a good opportunity for the City to increase affordable housing. Mayor Harpstead stated that he had initially had concerns about isolating a residential property from the community but the developer has addressed these concerns and is willing to put in sidewalks to provide access and he would support this motion at this time. He encouraged the residents to view the proposal on the City's website. Councilmember Grant asked how the amount of $400,000 was arrived at for the request. ARDEN HILLS CITY COUNCIL—September 14, 2009 21 7E. Arden Village Letter of Support(continued) Mr. Thelen stated that this project is similar in size to the one they completed in White Bear Lake and this is about how much they can support for tax increment financing. They looked at what participation level the City could support. Councilmember Grant asked if the City was locked into $400,000 because this is the amount in the request and in the letter. He asked if the letter specifies TIF as well. Councilmember Holden stated that the letter specifies TIF and an amount of $400,000. Mr. Thelen stated that they had received $350,000 for the 60-unit project in White Bear Lake with a 15-year district. The original request was for $400,000 but the City could only support $350,000 once all the financial numbers had been reviewed. Mayor Harpstead stated that the letter specifies an estimated amount of$400,000. Finance Director Iverson clarified that this would still need to go through an entire TIF analysis and the $400,000 was just an estimate. Councilmember Grant asked if$400,000 would be the high end of what the City would provide. Finance Director Iverson stated that $400,000 is what they are stating their needs are. There will be a TIF analysis to determine what the gap is and what the City can do, the amount could be decreased. Councilmember Holden asked if the Council would be having a discussion about the Cottage Villa TIF District. Finance Director Iverson stated that this was on the agenda in October sot he Council could extend the district and land uses. The motion carried on a 4-1 vote. Ayes—Harpstead, McClung, Grant, Holmes Nays - Holden ARDEN HILLS CITY COUNCIL—September 14, 2009 22 8. UNFINISHED BUSINESS None. 9., COUNCIL COMMENTS AND REQUESTS City Administrator Moorse stated that Chris Chromey from Bolton & Menk has been working on the noise issue for the Briarknoll neighborhood. He has some ideas for mitigation that he would like to share with the Council at the October 12, 2009 City Council meeting. Councilmember Holmes provided the Council with a report on the Library meeting that was held September 11, 2009. At this meeting Susan Nemitz, the Ramsey County Library Director, stated that there was funding for the Arden Hills library through 2010. During this time she will be working on a plan on how she can continue a library in this area. She will be looking into alternative sites for the library as the current site would need to be demolished. She would like to keep the library in the same general area of the City and make the library a "portal library" A portal library would be one that is open 40 hours a week that has some staff but not a reference librarian on staff full time and there would be access to the rest of the library system. She also stated that she would like to work with the City to keep the library open in Arden Hills. Councilmember Holden asked what size of a building they were looking for. Mayor Harpstead stated they are more concerned about the geographical location and may be looking for about a 10,000 square foot building. Councilmember Holden stated that they want to work with the City. She asked what this meant and if the City was going to need to fund the library. Mayor Harpstead clarified that there is money to operate the library for another year but no funding after this and a solution needs to be worked out. Councilmember Holmes stated the Ms. Nemitz would like to do some research on potential locations and after this is complete the Council could meet with her during a work session to discuss what the needs are and what the options are. Councilmember Holden asked if the intent was to keep a library somewhere in Arden Hills. ARDEN HILLS CITY COUNCIL—September 14, 2009 23 9. Council Comments and Requests(continued) Councilmember Holden asked if they were looking to partner with the City monetarily. Mayor Harpstead stated that this was not stated. They are interested in finding a facility solution and then funding sources for retro fitting a location to make it a usable library. It was indicated that there would be opportunities for the City to participate in the financing. Councilmember Holmes asked if it would be fair to say that if the library goes to Arden Hills then the County would expect some funding from Arden Hills. Mayor Harpstead stated that he did not get the sense that they were asking for bids in terms of access to the library but did get the sense that the title to the property is in the County's name and they would be looking at use of that land value in whatever new structure they head toward. Councilmember Holmes clarified that Arden Hills would have a better chance of keeping the library in Arden Hills if they provided some funding but this was not a situation where Arden Hills is bidding against New Brighton, or the City that offers the most financing will automatically get the library. Councilmember Holden asked if there was any money available beyond the $350,000. Mayor Harpstead stated that the agreement that Ms. Nemitz has with the County - Administrator is that if there was significant progress and a plan in place they would be able to obtain additional transitional funds. Councilmember Holmes suggested that the Council allow Ms. Nemitz to do some research and then set up a work session with her. Councilmember Grant asked if the statistics for I&I have been received from the MET Council. Public Works Director Greg Hoag stated that he has taken a preliminary look at the numbers and it looks like all the meters are below the Met. Council level. The levels are not as low as the City would like them to be but they are currently below the limits. He stated that he had requested Chuck Janski from Bonestroo to contact Met. Council to inquire about removing Arden Hills from their list based on these figures and was waiting for their response. ARDEN HILLS CITY COUNCIL—September 14, 2009 24 9. Council Comments and Requests(continued) Councilmember Grant asked if the levels were significantly lower. Public Works Director Hoag stated that the worst meter, which is meter shed 59, has about a 20% margin. At this time they are not seeing long-term infiltration but they are seeing spikes based on the rainfall and direct inflow sources. Councilmember Grant clarified that there would be further analysis brought back to the Council. Public Works Director Hoag stated that Staff is waiting for responses from the Met. Council and doing further analysis before bringing the data to the Council for review. Councilmember Grant clarified that the City was required by the Met. Council to spend $100,100 for I&I efforts. He asked if the City was going to meet this goal Public Works Director Hoag stated that at this time there is approximately $85,000 to $90,000 spent and this does not include the sewer lining project. Councilmember Holden asked if Staff was putting together a manhole project as well Public Works Director Hoag stated that Staff is consulting with Bonestroo to - determine the best place for spending the remainder of the funds based on the spikes that were seen in the readings. - Councilmember Holden asked if there was a plan in place for those residents that are not in compliance with the sump pump ordinance after the sixty days. Public Works Director Hoag stated that currently there are two properties that are beyond the sixty days. There is a letter going to these residents providing them with one week to get into compliance. If they are not incompliance after that then Staff will be working with Finance to set up a $100 per month surcharge until they are in compliance. Councilmember Grant requested a change be made to the spreadsheet that added one more column indicating what the City has paid for each of the non-compliant sump pumps to become compliant. ARDEN HILLS CITY COUNCIL—September 14, 2009 25 9. Council Comments and Requests(continued) Councilmember Grant stated that there had been a lot of talk about work force housing and in 1990 the Met. Council number was 288. He would like to see a good count on what the City has for affordable housing. Community Development Director Lehnhoff stated that this can be provided based on assessment values through Ramsey County. Councilmember Grant stated that this would not provide what rental units are available at what rates. Community Development Director Lehnhoff stated that this would be correct, especially the single-family rentals because this is not required. The figure 288 was from a study put together by the MET Council in 2006. This was their projected need for the City by 2020. This was based on the forecasts put together that accounted for more population increase than the City has had Councilmember Grant stated that it accounted for the build out of TCAAP as well. He asked that the numbers be run as TCAAP would have been and without TCAAP. Councilmember Holmes stated that is was not just what the City has but what they need to increase it to that is the issue. Mayor Harpstead stated that Council could request MET Council to attend a work session to discuss this. - Councilmember Holmes stated that this would be a good option. Councilmember Holden stated that this would be acceptable. Community Development Director Lehnhoff stated that these conversations would be easier to have during a work session. He stated that he would contact them and schedule a time. Councilmember Grant stated that the lift station road was paved as a trail/road last week and the residents have been really enjoying it. When the project is finished next year there will be a considerable amount of use. Councilmember Holden reminded everyone that the Taste of Northwest Youth and Family Services is September 24 and tickets can be purchased from her. ARDEN HILLS CITY COUNCIL—September 14, 2009 26 9. Council Comments and Requests(continued) Councilmember Holden stated that in the Admin Update there was statement that says if someone does their own work on the I&I they were automatically reimbursed $100. She asked where this came from. Public Works Director Hoag stated that there is a self labor rate of $100. This was part of the ordinance. Mayor Harpstead clarified that the City reimburses 50% of the cost. Councilmember Holden stated that Mn/DOT was changing the signage on Hamline Avenue so there is no left turn into Eide Circle. She asked if this information had been sent to the residents. Public Works Director Hoag stated that this information was sent to the residents. Councilmember Holden stated that she had been asked to give a presentation to the Arden Hills/Shoreview Rotary on September 15, 2009. She stated that Community Development Director Lehnhoff would be going with her. - Mayor Harpstead stated that the mayor of Shoreview was looking at the housing at the other end of County Road E, on the east end. They began the preliminary discussions of moving the retail strip to straighten the road. This may mean that Shoreview would be more interested in what Arden Hills does in the B2 district/ County Road E corridor. - Councilmember Holden stated that the traffic from the State Fair was really bad this year. Garbage being left by people was a big issue as well as tailgating in neighborhoods after the fair ended. She stated that the church was reimbursed for parking during the fair and the City should require them to take responsibility for the garbage clean up. Councilmember Holden stated that in review of the Fire Department budget she noted that they had requested $5000 for a television. It was discussed previously that the budget amount is in the contract and if they do not spend the entire amount then the excess funds go into their general fund and the City is not reimbursed. Mayor Harpstead stated that the Fire Department meeting is on Wednesday, September 16. He stated that he would follow up and provide an accounting on televisions. ARDEN HILLS CITY COUNCIL—September 14, 2009 27 9. Council Comments and Requests(continued) Finance Director Iverson stated that the Fire Department does not bill the City for shortages. Councilmember Holden stated that she would rather see the costs where they are actually than the budget being padded in other areas. Mayor Harpstead stated that he had attended the Regional Council of Mayors and Bill Melton, from IDS Financial Services, had spoken. The idea was that the end of the recession is in sight but the bottom will not be reached for another six months. Mayor Harpstead stated it was also shared that it could be two years before the states unemployment level reaches the level it was in 2007. Economic stimulus is going to stay low for two years and there will be no inflation pressure for two years. He will provide a copy for the Council. Councilmember Grant asked if there was any reasoning why the inflation rate would stay low for two years. Mayor Harpstead stated that he did not see a growth engine on the horizon that would drive up demand. Councilmember Holden stated that there had been a Northwestern Youth and Family Services meeting today. They discussed the new building that was constructed and having to get a new mortgage in two years due to the low donations they have received. There had been several banks present at the meeting saying that they would not want to renegotiate their mortgage due to double-digit increases they were expecting over the next couple of years. ADJOURN MOTION: Councilmember McClung moved and Councilmember Grant seconded a motion to adiourn. The motion carried unanimously (5-0)* Mayor Harpstead ad'ourned the Regular City Council Meeting at p.m. 60, sop, 6.01 Stan H st ad Ronald J. oorse Mayor City Administrator